Common Questions

What is a reverse mortgage?
A Reverse Mortgage is a loan available to seniors over the age of 62 which allows them access to some of the investment they have in their home. Most common is the FHA Home Equity Conversion Mortgage, created by HUD in 1987. Also available today is the Proprietary or Jumbo Reverse Mortgage, typically for homes in value higher than the current FHA  Max Claim amount of $679,650. The modern Reverse Mortgage can be used either to refinance an existing home or to purchase a new home.

How can I use the money I receive from a reverse mortgage?
Number one use of proceeds from the Reverse Mortgage is home improvement, followed by retire a current mortgage freeing up much needed monthly cash flow (remember that as a home owner you remain responsible for property tax, home owner’s insurance and any hoa fees), you can receive a monthly payment from your Reverse Mortgage or leave the available funds inside the Reverse Mortgage Line of Credit – similar to a Home Equity Line of Credit but with an actual Rate of Growth!

How can I qualify for a reverse mortgage?
One of the borrower must be at least age 62. The home must be your primary residence. Paid for or not. The property can be a Single Family Residence, Condo (FHA Approved for the FHA HECM), Duplex, Triplex, Fourplex or a Manufactured Home (built after June 1976, on property that is owned not leased, and is permanently affixed to the ground).

How much money can I get from a reverse mortgage?
HUD uses a calculation based on the age of the youngest borrower, the value of the home (or in the instance of the FHA HECM the Maximum Claim amount currently at $679,650) and the Expected Rate (based on the 10 Year Swap Rate).  And while the borrowers “willingness and capacity” to handle property costs are evaluated, unlike a conventional mortgage the lender does not use income, credit score or loan to value to determine your loan amount. And, the Reverse Mortgage rate of interest is one that you select… having an 800+ credit score will not gain you a lower rate, nor will having a 600 – credit score gain you a higher rate – you qualify for all available rates!